Meesho is a company based in Bengaluru, Karnataka, India, specialising in the ecommerce sector. Founded in 2015, it now employs 9600+ individuals. The company was established by Sanjeev Barnwal and Vidit Aatrey. Meesho operates as an online reselling platform that enables anyone to start a business without investment.
Meesho began as a simple platform to help small businesses and individuals sell products on social media platforms like Facebook and WhatsApp. Today, it has grown into a comprehensive e-commerce ecosystem that empowers millions of micro-entrepreneurs across the country. This case study delves into Meesho's journey, business model, growth strategies, challenges, and future prospects.
How Meesho works
Meesho has a vast range of products and services available for users to resell to various customers. The application has various suppliers who post their products online. A user has to share their catalogue to friends, family or others on various social platforms such as WhatsApp, Facebook, Instagram, Twitter and generate sales. With the Meesho App, you can earn a commission on every order. You can also earn a bonus from the organisation on making extra sales. Apart from this, users also get a chance to earn money by referring to the Meesho App to others (whether friends, family or others) looking to start their business. The products and services available on the platform are quite vast including clothing, accessories, gadgets, and more.
Fashnear —> Meesho
In 2015, when Meesho was started, it was known as FASHNEAR. The idea behind FASHNEAR was just like Swiggy or Zomato. FASHNEAR dealt with Fashion-related goods and allowed customers to buy clothes and fashion accessories from the shops in their locality. Local shops selling apparel and accessories could register with the FASHNEAR app, and customers could order from these local shops, and delivery persons were there to deliver the goods.
However, soon the founders started to notice some flaws in the FASHNEAR business model. Some major drawbacks they noticed were that consumers were not much concerned about buying clothes from local shops. Besides, the shop owners also wanted to increase sales by selling their products online in different locations of the country rather than selling their products locally. These problems inspired Vidit and Sanjeev to work on a better business model. By the end of 2015, Fashnear was renamed as 'Meesho.
The founder duo visited many shopkeepers and resellers to identify their problems. They noticed that many shopkeepers were already selling goods through WhatsApp, but their reach was limited because they deliver their goods locally only. They also found out that most of the shops registered on MEESHO were operated by women, and these women sold their goods out of their homes rather than in any physical shops.
Founders
Sanjeev Barnwal and Vidit Aatrey established Meesho in 2015.
Sanjeev Barnwal
Co-founder and Chief Technological Officer (CTO) of Meesho is Sanjeev Barnwal. Sanjeev Barnwal also held a position as an Android Camera Hardware Abstraction Layer Architecture Designer and Developer at Sony Mobile Communications. He earned his engineering bachelor's degree from IIT Delhi and previously worked for Sony Corporation.
He earned his engineering bachelor's degree from IIT Delhi and previously worked for Sony Corporation.
Vidit Aatrey
The co-founder and CEO of Meesho is Vidit Aatrey. The co-founder of Meesho formerly worked at InMobi, a mobile marketing platform, where he developed growth strategies for the business. While working at ITC Limited, Aatrey also had the opportunity to see the Operations side of the company.
Business Model
Meesho's business model deviates little from the direct-to-consumer (D2C) paradigm. In contrast to the direct-to-consumer (D2C) paradigm, which involves producers selling products directly to customers, Meesho functions as a platform that facilitates transactions between businesses, namely between manufacturers and reselling business owners.
These resellers work as go-betweens, bringing together producers and final customers. Meesho essentially operates in a business-to-business (B2B) environment. The corporation made this adjustment in 2021, moving away from its original reseller-centric model. Meesho no longer just facilitates transactions; instead, it helps companies increase sales, earning fees and commissions in the process.
Revenue Model
1. Commission from Sales
Meesho charges a commission on every sale made through its platform. This commission is a percentage of the product price, typically ranging between 10% and 20%.
Product Category: Different product categories may have varying commission rates.
Seller Performance: High-performing sellers might get lower commission rates as an incentive.
Order Volume: Bulk orders or higher sales volumes might attract lower commission rates.
2. Subscription Fees
Meesho offers premium services to sellers through subscription plans. These plans provide additional benefits such as better visibility, advanced analytics, and priority customer support.
Tiered Plans: Different subscription levels (basic, premium, enterprise) cater to various seller needs.
Additional Features: Features like advanced marketing tools, data analytics, and early access to new features can be part of premium plans.
3. Advertising and Promotion
Meesho provides advertising solutions for sellers to promote their products on the platform. Sellers can pay for sponsored listings, banner ads, and targeted ads.
Ad Placement: Sponsored listings, homepage banners, and category-specific ads.
Targeting Options: Sellers can target ads based on demographics, user behavior, and purchase history.
Pay-Per-Click (PPC): Advertisers pay based on the number of clicks their ads receive.
4. Logistics and Fulfillment Services
Meesho offers logistics and fulfillment services to sellers, charging a fee for shipping, handling, and delivery
Shipping Fees: Fees vary based on package size, weight, and delivery location.
Fulfillment Services: Additional services like warehousing, packaging, and return management can be offered for a fee.
Partnership with Courier Services: Collaboration with multiple courier services to offer competitive rates and options.
5. Transaction Fees
Meesho charges a transaction fee for each payment processed through its platform. This fee is a small percentage of the transaction amount.
Payment Gateways: Fees vary depending on the payment gateway used.
International Transactions: Higher fees for international transactions or currency conversion.
6. Data Analytics and Insights
Meesho can monetize the data generated on its platform by offering detailed analytics and insights to sellers, brands, and market researchers.
Custom Reports: Sellers can purchase detailed reports on sales trends, customer behavior, and market analysis.
API Access: Paid access to Meesho’s API for real-time data and integration with other tools.
7. Affiliate Marketing
Meesho collaborates with influencers and affiliates who earn a commission for driving sales through their unique referral links.
Strategies which helped Meesho to win
Meesho's success isn't accidental; it's a carefully crafted masterpiece, woven from threads of insightful observations and ingenious solutions. Here's how they cracked the code:
1. The Untapped Opportunity
Traditional e-commerce giants catered to urban, tech-savvy consumers, leaving a massive untapped market in rural India.
Meesho saw the potential in millions of individuals, especially women, who lacked access to entrepreneurial opportunities.
2. Social Selling Savvy
Recognizing the power of social media in India, Meesho leveraged platforms like WhatsApp to empower resellers to showcase and sell products.
This created a viral marketing network, building trust and bypassing expensive advertising channels.
3. Zero Inventory Nirvana
Traditional e-commerce models burden sellers with inventory risks. Meesho offered a zero-inventory solution, allowing resellers to list products from suppliers and earn commissions.
This reduced entry barriers and democratised entrepreneurship, making it accessible to even the most resource-constrained individuals.
Meesho’s Funding
Meesho has raised money through multiple rounds of funding. Here is the complete timeline of the funds that the business has raised over the course of years:
Meesho’s Impact
Meesho's real brilliance lies in how it has transformed lives and empowered communities, especially in:
Women Empowerment
Credits: Afaqs, Meesho’s 2024 International Women’s Day Campaign
Financial Independence: Meesho provides women, particularly in rural areas, with a platform to earn their own income, breaking free from financial dependence and challenging traditional gender roles.
Entrepreneurial Spirit: It nurtures entrepreneurial skills and confidence, encouraging women to become self-made business owners and catalysts for change in their communities.
Social Mobility: With financial independence comes greater social mobility and respect, breaking down societal barriers and fostering a sense of agency for women.
Digital Inclusion
Simplifying E-commerce: Meesho makes online shopping accessible and convenient for even those with limited internet access or digital literacy through its user-friendly app and social media integration.
Breaking Geographical Barriers: Consumers gain access to diverse products from across India, irrespective of their location, promoting cultural exchange and economic integration.
Expanding Opportunities: Digital literacy skills learned through Meesho open doors to further education, employment, and participation in the digital economy.
Beyond Business, Meesho's impact creates a ripple effect:
Increased household income: Women's earnings boost family finances, improving the quality of life for everyone.
Improved education: Families can invest in better education for their children, breaking the cycle of poverty.
Community development: With increased economic activity, rural communities experience improved infrastructure and social services.
Meesho’s Future
The primary reason behind the overwhelming success of Meesho is the fact that it allows their resellers to start their own online businesses with zero investment. Resellers do not need any inventory, equipment or resources to carry out their reselling business. All that is required is an internet connection and access to Whatsapp, Facebook and Instagram.
With each passing day, many micro, small and medium enterprises are joining the platform. Recent reports suggest that Meesho is looking to diversify its business model and target as many as 100 million small businesses and provide some decent competition to other giants.
The startup is now looking to include newer ones such as grocery, including staples and fast moving consumer goods (FMCG), as it goes head-to-head against the established online retailers. In the grocery segment, Meesho will provide direct competition to BigBasket, Grofers, and Reliance JioMart. Meanwhile, Meesho itself doesn’t face much competition for its core business; as a result, the road ahead looks highly promising.
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